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European Stocks Close Lower on Bond Yield Spike and Fed Bank Capital Decision

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  • The pan-European Stoxx 600 closed the session about 0.7% lower.
  • The Fed declined to extend a rule expiring at the end of the month that relaxed the supplementary leverage ratio for banks during the pandemic.
  • A number of EU countries resuming the rollout of the AstraZeneca vaccine Friday, after regulators recommended it continue to be used.

LONDON — European markets closed lower on Friday after a spike in bond yields reignited concerns about stock valuations, while a U.S. Federal Reserve decision not to extend a pandemic-era rule that had allowed banks to relax capital levels further hit risk assets.

The pan-European Stoxx 600 closed the session about 0.8% lower. Banks were the worst performing stocks Friday, dropping 2.3% to lead losses as all sectors except utilities slid into the red.

U.S. stocks were mixed after the Fed declined to extend a rule expiring at the end of the month that relaxed the supplementary leverage ratio for banks during the pandemic.

European stocks began the day with a weak handover from Asia-Pacific, where shares mostly declined during Friday's trade following Thursday's sell-off stateside. Following its latest monetary policy meeting, the Bank of Japan announced a raft of measures that included widening the range at which the 10-year Japanese government bond yield is allowed to fluctuate from the target level to between plus and minus 0.25%.

Oil prices were also in focus after a slump on Friday, as reports of new waves of coronavirus infections and further lockdown measures in Europe dampened the outlook for crude demand.

Germany and France are among the countries resuming the rollout of the AstraZeneca-University of Oxford Covid-19 vaccine Friday, after British and European medicines regulators recommended it continue to be used following concerns over a small number of recipients developing blood clots.

On the data front, British consumer sentiment notched a one-year high in March, according to a GfK survey, with hopes for an imminent economic recovery growing, as the country seeks to emerge from nationwide lockdown measures in the coming months.

In terms of individual share price movement, TeamViewer plunged 12.4% after the German remote working software company cut its 2021 guidance.

Danish IT consultancy Netcompany climbed 3.9% after securing a contract to develop Denmark's coronavirus passport for use from May, according to Danish media reports.

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